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Warehouse and DC Retrofits: Wet Seal’s slick transformation

With a bit of creativity, a lot of planning, and the latest in automated sortation technology, the retailer’s impressive DC retrofit increased merchandise-processing speed to its stores, improved accuracy to 99.5 percent, and significantly reduced transportation costs.

If you have a teenage daughter, you’ve probably heard of Wet Seal. With a customer base consisting of fashion-conscious 13-year-old to 19-year-old young women, this leading specialty retailer banks on its ability to offer the latest trends in fashion apparel and accessories at affordable prices—and the strategy is paying off.

Since its founding in 1962, Wet Seal Inc. has grown considerably. It now operates over 550 stores, including 473 Wet Seal stores and 86 Arden B stores in 47 states and Puerto Rico. While Wet Seal stores target the younger teen set, its Arden B chain provides contemporary fashion separates and accessories for women aged 25 years to 35 years. The company also offers its merchandise over the Internet in what has become a $30-million-per-year business.

At the logistics core of the retailer’s business is a 265,000-square-foot distribution center (DC) located in Foothill Ranch, Calif. In early 2010, this 10-year-old DC underwent a major transformation. An impending switch from pre-packs to unit distribution coupled with strong retail and e-commerce growth had been putting pressure on the distribution team to re-think its rather manual—and inaccurate—fulfillment system.

With a bit of creativity, a lot of planning, and the latest in automated sortation technology, it doubled its sortation capacity from 400 to 800 stores.

Merchandise, which used to take four days to five days to process is now in and out of the DC in about 24 hours—all of this without adding a single square inch of space.

How did this retailer pull it off? It installed three high-speed automated unit sortation systems to support store and e-commerce fulfillment in its existing 65,000 square-foot, 17-foot clear mezzanine. This new configuration allows for significant space savings as the induction stations for the unit sorters are “stacked” on top of one another, minimizing space requirements.

And for Charlie Torok, Wet Seal’s vice president of logistics, the value of this particular DC retrofit has been incalculable. “It allowed us to remain in Southern California, which is a strategic area for our inbound product that enters Long Beach from overseas,” says Torok. “With pre-clearance and the local port being in close proximity, we can receive and turn product to ship to our stores very quickly, while consolidating smaller items with larger shipments to leverage freight costs.”

Inaccurate and slow
Before 2010, Wet Seal’s store fulfillment process was fairly manual, supported by a carousel “put” system. Workers read “pick cards” to manually “put” pre-packs of the required quantity of products from vendor cartons to outbound store cartons placed in carriers attached to the carousel as it gradually moved by—it was slow and inefficient.

Receiving did not fare any better, as all inbound units had to be piece counted to verify receipts. Shipping was expensive because much of the freight had to be shipped to the stores via air to offset the extra two days to three days it took to process and fulfill store orders within the DC. “Our biggest problem was the lack of accuracy,” recalls Torok. “Workers would look at their pick cards and forget whether they picked it or not, so they would double pick it. At the end of the distribution, they’d say they were short when they actually may have double-shipped to a few stores.”

But the last straw was the company’s plan to shift from pre-packs to single-unit distribution in an effort to more closely replenish to actual demand patterns to each store. If done manually, this would have required a significant increase in personnel. Torok and his team knew sweeping changes needed to be made.

About the Author

Maida NapolitanoContributing Editor

Maida Napolitano has worked as a Senior Engineer for various consulting companies specializing in supply chain, logistics, and physical distribution since 1990. She’s is the principal author for the following publications: Using Modeling to Solve Warehousing Problems (WERC); Making the Move to Cross Docking (WERC); The Time, Space & Cost Guide to Better Warehouse Design (Distribution Group); and Pick This! A Compendium of Piece-Pick Process Alternatives (WERC). She has worked for clients in the food, health care, retail, chemical, manufacturing and cosmetics industries, primarily in the field of facility layout and planning, simulation, ergonomics, and statistic analysis. She holds BS and MS degrees in Industrial Engineering from the University of the Philippines and the New Jersey Institute of Technology, respectively. She can be reached at .(JavaScript must be enabled to view this email address).

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